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City approves 11% property tax hike

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Posted on: May 30, 2024

By SHARON O’MALLEY

The College Park City Council on May 21 adopted a $27.4 million operating budget for fiscal year 2025 that includes the city’s first residential property tax rate increase in 10 years.

The approved budget includes a residential rate increase of 11% that calculates out to an additional 3.32 cents per $100 of a home’s assessed value, moving the rate from 30.18 cents this fiscal year to 33.5 cents in 2025.

“We do not take proposing a property tax increase lightly,” Gary Fields, director of the College Park Department of Finance, said at a May 7 budget hearing. “It’s the last thing we want to do. … We’re looking to the future to make sure we stay financially sound.”

Councilmembers voted to lower the rate from a proposed 34.18 cents to 33.5 cents on May 7 after a public hearing on the budget, during which a handful of residents objected to the tax increase. In addition, nearly 20 residents wrote emails to the council objecting to the change. The original proposed increase would have raised the rate by 13%, or by 4 cents per $100 of assessed value.

At the public hearing, Daniels Park resident Brian Roan urged councilmembers to restrict the amount of the tax increase, warning that some homeowners in College Park are considering leaving the city because of rising costs.

“We’re looking at a massive drain of families and long-time residents who wanted to stay here but decided they cannot,” Roan said. “Some of the things in the budget sort of reflect the outlook of the people who are being driven away … not just the taxes.”

Others suggested a tax increase would be unnecessary if the city cut spending.

“I am not in favor of a … property tax increase, especially to help pay for things such as a rental subsidy to support college students to pay these high-price rents near the university,” long-time College Park resident Bonny Davis wrote in an email. “Residents of CP should not have to bear the burden of rental assistance for UMD college students.”

In April, the city council approved $150,000 to fund a needs-based student housing subsidy pilot program, which will give grants to up to 60 full-time undergrads who qualify for federal Pell grants and up to 60 graduate students whose household income is less than 60% of the area median income.

But City Manager Kenny Young, who called this year’s budget process “a daunting task,” noted that increases in city services, inflation, sustainability efforts, and new city parks and facilities have created a need for a larger budget.

In addition, the city will increase the salaries of 75 of its 130 employees, whose pay is less than 50% that of workers in nearby governments with similar positions, according to a recent compensation report.

“I want to work with you to get our employees to a level that is commensurate with the effort that they give to this city and the services we provide,” Young told the council on May 7. He added: “I want to make sure this community is well taken care of, and that we can take care of our residents during the good times and bad times.”

Councilmember John Rigg (District 3) acknowledged at the May 21 meeting that “it was a tough budget year. … I think we came to a place to where not everybody on this dais, not everybody in the city is satisfied, but given the constraints, I think we got to a place of compromise that is a very reasonable compromise for our residents and still moves forward our important priorities while constraining spending in some important ways.”

The residential property tax increase is the first since fiscal year 2014, when the city raised taxes from 32.2 cents per $100 of assessed value to 33.5 cents.

Between 2020 and 2023, the city lowered property taxes by 10%, from 33.5 cents to 30.18 cents. The newly approved tax increase brings the rate back to the amount homeowners paid between 2014 and 2019.

“That was our standard rate,” Councilmember Stuart Adams (District 3), said at the May 7 meeting. “It’s bringing us back to where we were only a few years back.”

Adams noted that the assessed property values in the city have increased over the years, effectively raising property taxes for many homeowners.

In 2024, commercial property taxes for apartment and office buildings in the city increased by 3 cents per $100 of assessed value, from 30.18 cents to 33.18 cents. Until 2024, the city applied a single tax rate to both residential and commercial property.

The newly approved budget increases the commercial tax rate to 38.5 cents, down from an original proposal of 40 cents.

“Looking at the landscape of tax rates across the county, this is well within the range of the difference between residential and commercial tax rates in municipalities that have that breakdown,” said Councilmember Susan Whitney (District 2), who proposed lowering the originally agreed-upon residential and commercial tax increases.

Whitney said the 38.5 cent commercial rate would be the lowest in Prince George’s County among cities that charge a different rate for residential and commercial properties.

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